So many lives, businesses, jobs, and families have been impacted, disrupted, and devastated during 2020 and you would think that there were no positive situations or events whatsoever. However, for those renting, at least there were laws passed where one could not be evicted or foreclosed upon, and those have now been extended as of Dec. 27. However how long that will be in effect is anyone’s guess, especially if you have lost yourbusiness, job, or your salary was drastically reduced.
How about the small landlord whose income is dependent upon the tenants paying their rent, what about them? It appears that President Trump had finally signed the next stimulus package to help the millions who are unemployed and in desperate need of money to survive. What about those restaurateurs and small business people who applied but never received any assistance through the PPP (Paycheck Protection Program) or the EIDL (Economic Injury Disaster Loan) program? I wonder how many thousands of restaurants and small and large businesses and jobs have been and will be lost forever due to not having enough money to weather the storm and survive through the last nine months and in 2021.
So many are barely in a survival mode which can be verified and experienced from all the reports and visuals online and on TV by the countless food lines in and around Long Island and throughout the country. My Rotary Club of Great Neck through the smart and hard work of Roger “the Organizer” Chizever and all the volunteers (including myself), put together and provided 1,200 complete turkey dinners for a family of four to those who were financially unable to provide their own dinners on Thanksgiving. Some good and caring moments and events occurred during 2020, so everything wasn’t a total disaster.
One of the remarkable shining stars and beneficiaries of the Covid-19 pandemic were those who purchased a primary residence, already owned their home, as well as those with rental investment properties outside major cities e.g.(NYC, Chicago, Boston, San Francisco, Los Angeles, Houston and Miami). Those investors were able to rent their places to those leaving densely populated locations and their higher infection rates and were part of the real estate boom as well. Those fortunate enough to become first-time purchasers gained above-average appreciation and increased value year over year.
Prices around the United States have gone up quite aggressively from 9.3 percent to over 10 percent depending on the town and state. Nassau Country showed a September median price of $590,000 with an increase of 9.3 percent. Suffolk Country median prices in September rose to $464,375 year over year with a startling increase of 13 percent as per One Key MLS (our new corporate name of the multiple listing service of Long Island since we partnered with Westchester MLS, Hudson-Gateway, making our membership more than 40,000 strong). All increases were way above the inflation rate of 1.18 percent as of October 2020 and the core inflation rate of 1.61 percent, excluding the energy and food sectors, because they have wide swings making the inflation rate less accurate.
The year 2020 was a perfect storm for real estate as it came in like a lion, then became a lamb for a few months, and has now roared back like a lion once again with the help of our crazy 50-year low in interest rates, still very strong demand, and the historical lowest inventory on record contributing to this event. Even though our industry was shut down from March 22-June 10, the market came back like a bull and remarkably sales skyrocketed beyond anyone’s wildest dreams and expectations. Although lower than 2019, prices ended up much higher compared to 2019 as noted earlier. So 2021, should continue the surge in demand, rates should similarly hold over the next 12 months, and supply will still be historically low.
As prices continue to escalate, however, there will be more families and individuals who will not be strong enough financially to qualify for a mortgage or not have enough for their down payment. So for the time being they will have to drop out and continue to rent or stay put in their in-laws’ or family’s homes to continue to save more money and this could slow our market a bit. But eventually they will jump back into the game sooner if prices were to stabilize or possibly decrease, which for the foreseeable future I really do not see occurring. But no one can really know or accurately predict the future until the future arrives and what will and does happen that could curtail sales and lower prices for those sitting on the sidelines waiting to come back in the game and purchase their first home.
On a personal note, I want to wish my wife a happy 45th anniversary today Dec. 28 and at least another 30-plus to go!
I hope everyone will let their hair down, have some crazy fun, relax a bit on New Year’s Eve to end the year on a higher note, and try to put aside the worst year that we’ve ever experienced! But we are not out of the woods just yet.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 39 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). For a “FREE” 15 minute consultation, a value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com Just email or snail mail (regular mail) him with your ideas or suggestions on future columns with your name, email and cell number and he will call or email you back.